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The Principal Financial Well-Being IndexSM Summary 4th Quarter 2011

This Principal Financial Well-Being IndexSM survey was conducted online within the United States by Harris Interactive on behalf of the Principal Financial Group® between October 20 and October 31, 2011 among 1,121 employees and 533 retirees. This is one in a series of quarterly studies to identify and track changes in the workplace of small and mid-sized (growing) businesses. The first Principal Financial Well-Being IndexSM survey was conducted in the United States in 2000.

Employees consisted of adults 18+ who work at small and mid-sized (SMB) U.S. businesses (firm size 10-1,000 employees). Retirees consisted of adults age 60+ who reported they are retired or those who are employed part-time or self-employed and have retired from a previous career. Results were weighted as needed for age by gender, education, race/ethnicity, region and household income. Propensity score weighting was also used to adjust for respondents’ propensity to be online.

All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of error which are most often not possible to quantify or estimate, including sampling error, coverage error, error associated with nonresponse, error associated with question wording and response options, and post-survey weighting and adjustments. Therefore, Harris Interactive avoids the words “margin of error” as they are misleading. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100% response rates. These are only theoretical because no published polls come close to this ideal.

Respondents for this survey were selected from among those who have agreed to participate in Harris Interactive surveys. The data have been weighted to reflect the composition of the entire population of adult employees working for small to mid-sized U.S. businesses and retirees. Because the sample is based on those who agreed to be invited to participate in the Harris Interactive online research panel, no estimates of theoretical sampling error can be calculated.

Download the Full Report (PDF: 747 KB) - includes all questions and data

Featured Key Findings


  • Financial Well Being
    • Seven out of ten employees and slightly fewer retirees (63%) are very concerned with their long-term financial future.
    • A third of retirees (34%) and three out of ten employees (31%, up significantly from 27% last quarter) are extremely happy about their current financial well being.
      • Employees who use the services of a financial advisor for financial advice, guidance, and/or products for a fee or commission are significantly more likely to report they are extremely happy with their current financial well being (43%) than employees who do not use a financial advisor (28%).
    • A quarter of employees (26%) have not yet planned for retirement savings/security.
      • Employees who use the services of a financial professional are less likely to say they have not yet planned for retirement savings/security (7%) than employees who do not use the services of a financial professional (31%).
  • Stress Levels
    • Half of retirees (52%) and two out of five employees (42%) rated their stress level with the economy as high (an 8, 9 or 10 on a 10-point scale).
    • A third of employees (34%) and three out of ten retirees indicated personal finances was a high level of stress for them.
    • Additionally, three out of ten employees said their job is highly stressful.
    • Stress levels related to their physical health were the lowest reported levels, rated highly by only 15% of employees and about one out of five retirees (19%).
  • Holiday Spending
    • About three out of five employees (61%) and over half of retirees (55%) plan to spend the same amount of money as they did last year for the holidays. A third of employees (34%) and even more retirees (43%) plan to spend less money than they did last year for the holidays.
    • Top payment methods for holiday gifts this year are credit cards which are expected to be paid off prior to incurring any fees/interest (31% of employees; 37% of retirees), cash (29% of employees; 30% of retirees) and debit cards (22% of employees; 13% of retirees).
    • Over half of employees and retirees (55% of both groups) expect holiday expenditures to put a moderate amount of stress on their personal financial situation this year.
    • Two thirds of employees (68%) and over half of retirees (54%) indicate that they usually do their holiday shopping during the holiday season. Just under half of both groups (45% of employees; 44% of retirees) shop before the holiday season in order to spread out the cost over several months (69% of employees; 62% of retirees), avoid heightened stress at holiday time (56% of employees; 49% of retirees) or take advantage of sales (40% of employees; 46% of retirees).
  • Financial Blunders of 2011
    • When asked to select the top financial blunder they have made this year, employees' top response was not saving enough, selected by about one out of five employees (19%).
    • Increasing debt (18%) was the next most common selection among employees, either in the form of credit card debt (12%) or other forms of debt (6%).
  • New Year's Financial Resolutions
    • Similar to 2010, the top two resolutions selected by employees were putting a set amount of money into savings each month and paying off credit card debt, both selected by over a quarter of employees (26%). One out of five employees (21%) also indicated they are resolving to reduce their spending by a specific amount each month in 2012.
    • Retirees' top resolutions were to reduce their spending by a specific amount each month and put a set amount of money into savings each month, both selected by 17% of retirees. Paying off credit card was also selected as a New Year's financial resolution for 2012 by 15% of retires.
  • Economic Outlook
    • Over three quarters of retirees (78%, up significantly from 67% at this same time last year) and over half of employees (56%, up from 50% at this same time last year) said they do not feel better off financially now than they did at the beginning of 2011.
    • Consistent with last quarter, over half of retirees (56%) think the economy will worsen over the next year. Significantly fewer employees this quarter believe the economy will worsen over the next year compared to last quarter (39% versus 46%).
    • In thinking about issues of concern in the New Year, employees' top concerns are around economic uncertainty (62%), gas prices (58%), health care costs (55%), food prices (49%) and increased taxes (45%).
  • Financial Dreams
    • A third of both employees and retirees said they are confident, very confident or extremely confident in their ability to achieve their dreams for their financial future.
      • Employees who use a financial professional were significantly more likely to be confident, very confident or extremely confident in their ability to achieve their dreams for their financial future (42%) than employees who do not use a professional (25%).
    • The top financial dreams for employees are to be financially secure (21%), to have financial security in retirement (20%) and to be debt free (15%). For retirees, the top financial dream is good health, chosen by a quarter of retirees.
  • Financial Professional Usage
    • Only 20% of employees and just over a quarter of retirees (29%) indicate they use a financial professional who provides them financial advice, guidance, and/or products for a fee or commission.
      • Employee financial professional usage is more common in households with higher incomes.
  • Retirement Threats
    • For three out of five employees (57%), insufficient retirement savings threaten their future retirement. Reductions in Social Security are believed to threaten the retirement of nearly another half of employees (46%). Other common retirement threats for employees include market volatility (40%) and reduced Medicare benefits (35%).
    • Retirees' most commonly selected retirement threat was reduced Medicare benefits (60%), followed closely by reductions in Social Security (58%). Market volatility (29%) and insufficient retirement savings (28%) also threaten the retirement of at least a quarter of retirees.
  • Employee Benefits
    • Employees continue to rate health insurance as the most important benefit (90%), followed by defined contribution retirement plans (69%) and dental insurance (65%). Health insurance is the benefit most employees would like to see improved (39%), while defined benefit plans is the benefit most employees would like to see their employer offer (24%).

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